NEW YORK - Stocks closed mixed in uneven post-holiday trading
Thursday as a rebound in bond yields stifled Wall Street's
excitement about new buyout activity and strength in the U.S.
service sector.

The Institute for Supply Management's index of service sector
activity rose to 60.7 in June from 59.7 in May, indicating that
non-manufacturing industries saw slightly faster expansion. The
figure was better than expected, fueling sentiment that the economy
is recovering from a slow first quarter.

However, the data weighed on bond prices, which were already
weak after payroll company Automatic Data Processing and
consultancy Macroeconomic Advisers said the private sector added
150,000 jobs last month - a good sign that the Labor Department's
report on June nonfarm payrolls Friday will show a solid rise.

As bond prices fell, the 10-year Treasury note's yield shot up
to 5.14 percent Thursday from 5.04 percent Tuesday, ahead of the
July 4th holiday. On Monday, the 10-year yield had slipped below
the 5 percent level for the first time since early June.

Robust data can be double-edged for the stock market; though
investors want the economy to strengthen, they remain worried that
it will cause interest rates to rise, which can slow down
business.

But the 10-year Treasury yield would have to rise significantly
to do any real damage to the stock market, said Joe Balestrino, a
portfolio manager at Federated Investors Inc. "If things are good,
yields are supposed to be a little higher."

Also hurting the Dow Jones industrial average was General Motors
Corp., one of the blue-chip index's 30 components. GM was
downgraded by a Bear Stearns analyst after the automaker on Tuesday
posted a 21.3 percent drop in June sales compared to last year.

According to preliminary calculations, the Dow fell 11.46, or
0.08 percent, to 13,565.84.

The technology-laden Nasdaq was lifted in part by Apple Inc.,
which rose $5.71, or 4.5 percent, to $132.88 after hitting an
all-time high on continued enthusiasm over the iPhone. BlackBerry
maker Research In Motion Ltd. also buoyed the Nasdaq, reaching a
record high after saying it got cleared to sell its smartphones in
China. Research in Motion rose $8.34, or 4 percent, to $216.28.

Many on Wall Street remained confident about stocks amid
takeover news. Hilton Hotels Corp. agreed Tuesday to an all-cash
buyout from Blackstone Group in a $20.1 billion deal; chemical
company Huntsman Corp. said Wednesday a private equity firm made a
cash buyout offer of about $6 billion that trumps last week's bid
from a Dutch company; and a Coca-Cola Co. spokesman said Wednesday
the company is looking into buying Cadbury Schweppes PLC's Snapple
iced tea brand or building its own tea brand.

Coca-Cola slipped 26 cents to $52.64, while GM fell $1.20, or
3.2 percent, to $36.78 after the analyst downgrade.

The dollar rose against most major currencies on strong U.S.
economic data, and gold prices fell. Meanwhile, the European
Central Bank indicated it might raise rates later in the year than
some analysts had expected, pressuring the euro lower.

Light, sweet crude futures bounced back from earlier losses,
rising 40 cents to $71.81 a barrel on the New York Mercantile
Exchange. Unrest in Nigeria, a major U.S. oil supplier, offset a
report from the Energy Department showing oil and gasoline
inventories increased last week.

Declining issues outnumbered advancers by about 4 to 3 on the
New York Stock Exchange, where volume came to 1.25 billion shares.
Trading volumes were relatively light with many of the big players
out of the office following the July 4th holiday.